Mold, Bugs, Floods, Earthquakes . . . Unpleasant Risks You Need to Understand
“Many small investors get into trouble because they try to do everything themselves, right down to their own legal and tax work. To be successful with your real estate project, you need to get the best people in the field to help you.”
— from Trump Strategies for Real Estate: Billionaire Lessons for the Small Investor by George Ross, (Wiley, 2004).
In this chapter, we will take a close look at mold, insect infestations, flooding, and earthquakes. From bugs to earth tremors, all in one chapter? That might seem like an odd range of topics. But there is a good reason. Each of problem, in its own way, can dramatically reduce the value of the properties you own. Let’s see how to protect your properties and your money from these threats that can imperil your real estate fortunes.
All About Mold
A case study you can profit from . . .
On a cold February day back in 2003, a pipe burst in Christopher Reilly’s ranch house in Michigan. “It must have been two or three days before I was aware of the problem,” he recalls. “I was pulling the car out of my garage one day and noticed a pool of ice on the floor. I looked up and saw that water was dripping down from the ceiling.”
He called a plumber, who had to break through the bathroom wall to fix the leak. Christopher had a tile installer come and repair the wall and the problem seemed to he over. But the following June, Chris smelled a musty odor in his garage. He looked up and saw a bunch of fuzzy black spots on his garage ceiling. “Oh, hell, I have some mold up there,” Christopher thought. He called Jack, a handyman he had used in the past, to repair the problem. Jack opened the garage ceiling and was greeted by a mildew-like stench. He removed a two-foot-square section of sheetrock, but counseled Christopher against replacing it right away. “Leave the ceiling open for a few months to let everything dry out,” he advised. Christopher did, but noticed a week later that the mold spots seemed to be spreading across his garage ceiling. He was beginning to wonder just how big a problem he really had. One thing that didn’t help was the way Christopher’s work colleagues reacted when he told them he had a mold problem in his house. They didn’t seem to know much about the problem, but they didn’t hesitate to tell him that if the mold had spread far through his house, his property would be worthless on the marketplace.
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